4 Pinocchios for Mitt Romney’s misleading ad on Chrysler and China

“Who will do more for the auto industry? Not Barack Obama. Fact checkers confirm that his attacks on Mitt Romney are false. The truth? Mitt Romney has a plan to help the auto industry. He is supported by Lee Iacocca and the Detroit News. Obama took GM and Chrysler into bankruptcy and sold Chrysler to Italians who are going to build Jeeps in China. Mitt Romney will fight for every American job.”

— voiceover in unannounced Mitt Romney television ad running in Ohio

When a campaign does not announce a television ad, it’s a good sign that it knows it is playing fast and loose with the truth. Indeed, this is an excellent example of an ad that has a series of statements that individually might be factually defensible, but the overall impression is misleading.

The ad also comes on the heels of Mitt Romney’s mistaken claim in a speech last week that Chrysler was moving Jeep production to China — a statement immediately denied by the auto manufacturer. Yet the story apparently was too good for Romney to give up, because the ad repeats the claim, tweaked slightly to make it more accurate.

The Facts

Here’s what Romney said last Thursday in Ohio: “I saw a story today that one of the great manufacturers in this state, Jeep, now owned by the Italians, is thinking of moving all production to China. I will fight for every good job in America, I’m going to fight to make sure trade is fair.”

This was completely wrong. Bloomberg News had reported that Fiat, the majority owner of Chrysler, was planning to once again start building Jeeps in China, after production had been on hold since 2009.

The article made clear that Chrysler was was “adding Jeep production sites rather than shifting output from North America to China,” but some blogs, such as the Washington Examiner’s Washington Secrets, misinterpreted the article and reported: “Jeep, the rugged brand President Obama once said symbolized American freedom, is considering giving up on the United States and shifting production to China.”

After Romney made his comments, Chrysler issued a statement firmly denying that any North American production was being moved to China:

“Jeep has no intention of shifting production of its Jeep models out of North America to China. It’s simply reviewing the opportunities to return Jeep output to China for the world’s largest auto market. U.S. Jeep assembly lines will continue to stay in operation. A careful and unbiased reading of the Bloomberg take would have saved unnecessary fantasies and extravagant comments.”

In response, a Romney spokesman explained: “The larger point that the governor made is that rather than creating jobs here, the foreign owner, handpicked by President Obama, is planning to add jobs overseas.”

This is a strange bit of spin, given that all international automakers build cars in other overseas markets. In this case, one could argue it is a sign of the company’s growing strength that it is returning to a major overseas market that it had abandoned. (Moreover, Chrysler is planning to add to its Jeep workforce in the United States in 2013.)

Now back to the television ad. Clearly this is an attempt to rebut Obama’s frequent criticism that Romney’s plan to deny the automakers a federal bailout and take them through managed bankruptcy would have destroyed the industry. No one can say for certain what would or would not have happened, but we have taken both men to task for the way they have spoken about the issue — Obama for suggesting Romney wanted to give up on the auto industry and Romney for claiming that Obama simply took his idea for using the bankruptcy process.

Our bottom line was that Obama had the edge in the argument: “By most accounts, Romney’s approach would not have been viable in the depths of the economic crisis. And certainly Romney’s prediction that a bailout would lead to the auto industry’s certain demise was wildly incorrect.”

The ad cites a PolitiFact column that focused on a narrow point made by Obama in the last presidential debate, saying Romney would not have provided any government assistance to the automakers. PolitiFact actually concluded that Romney was so vague and unclear at the time that it difficult to figure out what he would have done. Thus it concluded Obama could not be so categorical. From this slender reed, the Romney campaign incorrectly claims that all fact checkers dispute Obama on auto bailout claims. No so.

Yes, Obama ultimately took the automakers through bankruptcy, but that was only after the predicate had been established for their survival, including extending government loans (a process originally started by the George W. Bush administration over Romney’s objections).

Indeed, while the ad cites the conservative Detroit News in supporting Romney for president, the editorial largely comes to same conclusion as this column regarding the viability of Romney’s plan for the auto industry in the midst of the Great Recession. The newspaper said Obama’s response to the auto industry crisis was “extraordinary” and an example of his “leadership on this issue:”

Don’t assume that it was a no-brainer for a conservative newspaper to endorse a conservative presidential candidate. We recognize and are grateful for the extraordinary contribution President Obama made to Michigan in leading the rescue of General Motors and Chrysler. Had either of those companies been allowed to go under, Michigan’s economic maladies would have become fatal.

The president stepped up with the support the two automakers needed to keep themselves and their suppliers in business. We have said in past editorials that while Romney rightly advocated for structured bankruptcies in his infamous “Let Detroit Go Bankrupt” New York Times op-ed, he was wrong in suggesting the automakers could have found operating capital in the private markets. In that article, Romney suggested government-backed loans to keep the companies afloat post bankruptcy. But what GM and Chrysler needed were bridge loans to get them through the process, and the private credit markets were unwilling to provide them. Obama put a rescue team to work and they were true to the task.

We have criticized Obama in past editorials for rewriting bankruptcy law on the fly to hold harmless his supporters in the United Auto Workers union. Still, Michigan is better off today because of Obama’s leadership on this issue.

Finally, the ad’s reference to Jeep production in China is technically correct but misleading, particularly in light of Romney’s comments on the campaign trail. The ad says that Obama “sold Chrysler to Italians who are going to build Jeeps in China,” but then adds: “Mitt Romney will fight for every American job.”

The unspoken message is that American jobs are being sent to China, even though the ad carefully tiptoes around that claim. (The ad, in fact, includes brief text quoting Bloomberg as saying Jeep production was returning to China.)

The Pinocchio Test

This ad shows that we have entered the final, desperate week of the campaign.

The series of statements in the ad individually may be technically correct, but the overall message of the ad is clearly misleading — especially since it appears to have been designed to piggyback off of Romney’s gross misstatement that Chrysler was moving Ohio factory jobs to China.

It is also especially strange that the ad touts Romney’s endorsement by the Detroit News, when the editorial actually backs up Obama’s criticism of Romney’s response to the auto industry crisis.

UPDATE: A senior Romney campaign official faulted this analysis for conflating what Romney said in a campaign speech with the messages in the ad. “He did not repeat it on the stump and it did not get much coverage,” he said, noting most of the coverage (including in The Washington Post) focused on the endorsement by Meat Loaf. “I just don’t think you can say the campaign is creating a falsehood,” he said. “We are not saying they are cutting jobs here. We are saying they are adding jobs to China.”

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